USD/CNH extended losses after the PBoC...>

CHINA YUAN: USD/CNH extended losses after the PBoC fixed the USD/CNY mid-point

below expectations. The pair last trades at CNH7.0944, 84 pips lower on the day

and off lows.

- The fixing of China's Loan Prime Rate takes the spotlight today, with BBG

consensus calling for minor cuts in both the 1-Year and 5-Year rate. The numbers

will be published at the bottom of the hour.

- Negotiators from the U.S. and China hold talks in Washington to set the scene

for top-level meetings next month. White House advisers struck conflicting notes

on the current state of Sino-U.S. trade relations, as Larry Kudlow's optimism

diverged from Michael Pillsbury's combative remarks.

- The initial bearish target is provided by CNH7.0723, which represents the

23.6% retracement of the Mar-Sep rally and also the low of Sep 18. Below there

would create a chance to take out the 50-DMA, intersecting at CNH7.0394 and the

Sep 13 monthly low of CNH7.0312. Conversely, bulls need a break above CNH7.1064

to uphold yesterday's momentum and turn their focus to the Aug 6 peak at

CNH7.1400.